Following the speedy decrease in the production of solid minerals during the late 1960s, successive government administrations enforced different policies to resuscitate and gear up the fate of the sector. Some of such actions included the creation of public-funded mining institutions in the 70s and 80s which failed, followed by the privatization of those institutions in the 90s (Damilek, 2017).
Then towards the end of the 90s, the government and stakeholders held national discourse on the sector’s problems and how to attract private investment leading to the passage of the Nigerian Mineral and Mining Act in 2007, followed by the Mineral and Mining Regulations of 2011 (KPMG, 2017). It was obvious in 2015 that the desired outcomes and the expected level of growth in the mineral sector had not been achieved, and further actions were necessary.
Some of the key challenges that were identified as affecting the implementation and success of government efforts to attract private sector participation and investment included the following (KPMG, 2017)
- Lack of adequate and current geoscience data
- Poor infrastructural facilities
- Inadequate security and protection
- Pervasive illegal mining and community upheavals
- Lack of favorable or robust fiscal policy (taxation and financial relief)
- Lack of guaranteed project funding in support of the sector
In late 2015, Nigeria slipped into an economic recession that was attributed to the dwindling revenues from the oil sector due to declining oil and gas prices. As part of the desire to vigorously revive and revamp the country’s monolithic economy, the Federal government embarked on a strategic plan of economic diversification by finding better ways to increase revenues from other sectors of the economy, particularly the agricultural and solid mineral sectors. In September 2016, the Federal Government launched a strategic plan that was called a ‘Roadmap’ for the Solid Minerals Sector’ (MMSD, 2016).
The ‘roadmap’ was created with the main objective of addressing the key challenges facing the solid minerals sector, and outlining strategies for rapid development and utilization of key industrial minerals and metals. One of the targets of the roadmap is to grow the mineral sector’s total contribution (direct and indirect) to Nigeria’s GDP to about 10% by 2026. Part of the strategy will involve increased production of metallic and industrial minerals by implementing policies that encourage more local content by various industries (KPMG, 2017).
The roadmap will be implemented in stages for 15 years, and identified three key development phases for the achievement of the aspirations and objectives as follows: Phase 1 is to rebuild market confidence in the minerals and mining sector and win over domestic users of industrial minerals that are currently imported: Phase 2 is to expand the domestic ore and mineral processing industries through increased beneficiation, and Phase 3 is to return Nigeria to the global ore and mineral markets at a market competitive price point. The success of the roadmap will depend a lot on the cooperation of all stakeholders including various trade associations, major companies, and the professional class.
The Federal Government is expected to provide incentives and create the enabling environment through the provision of transportation infrastructures, bulk handling terminals, power supply, public security, regulatory reform, and expansion of access to bank loans (MMSD, 2017) In building a viable minerals and mining sector, the utmost priority is to increase production and domestic utilization of the country’s industrial minerals and rocks and exploit domestic iron ores to promote and support rapid industrialization, particularly of the iron and steel industry.
Nigeria imported about $45 million (US dollars) worth of industrial minerals and $3 billion (US dollars) of iron and steel products annually. If local sources of these materials are used as import substitution, it will save the country’s foreign exchange and create jobs. With the apparent realization that Nigeria may not discover world-class metallic deposits, the focus should be on industrial minerals iron ore, and coal. The implementation objectives of the Roadmap should include:
- Development of industrial minerals and rocks through further exploration and beneficiation to increase domestic utilization in construction and manufacturing (e.g. barite, bentonite, salt, gypsum, phosphate, limestone, marble, and dimension stone.
- Development of energy minerals, particularly bitumen, coal, and uranium (discovery in Cross River State) for local use and power generation.
- Development of the iron and steel industry through the rapid exploitation and beneficiation of iron ore raw materials at Itakpe mine and Kogi Iron mine for domestic use at Ajaokuta and Delta-Aladja iron and steel complexes, and the thirty steel rolling mills located all over the country.
Some of the recent developments in the solid minerals sector point in the right direction, particularly the provision of funding by the Ministry of Mines and Steel Development (MMSD) of 30 billion naira ($85 million) from the Mining Intervention Fund (MIF) to open up the solid mineral sector to multinational companies as well as use the fund to provide up-to-date geoscientific data and promote detailed mineral exploration and research by the Nigeria Geological Survey Agency in cooperation with experienced private mineral exploration and mining entities.
A consortium of international organizations including the World Bank has been supportive of the Federal Government’s efforts and promised financial loans in support of the mineral exploration program to the tune of 150 million dollars. This is in addition to the already existing memorandum of understanding (MOU) signed between the Federal government and a consortium of Chinese and Nigerian investors to enable the consortium to mine coal to generate up to 1,200MW of electricity.
The metal mining subsector is currently dominated by indigenous companies and individuals, mostly involved in small-scale and artisanal mining. Given the significant investment and technical expertise required for mining operations, the accelerated growth and development of the mining subsector will require foreign investment. The future outlook for the growth and development of the solid mineral sector is promising, as a result of the expected implementation of the strategic plans in the roadmap and increased incentives for foreign investment.
Mineral surveying and geological mapping in Nigeria for over a century has shown that Nigeria has discovered several hundred mineral occurrences but does not have the geological and tectonic environment that is conducive for the formation of large world-class metallic ore deposits. Such a situation is not unusual because each country is endowed differently. However, there are opportunities to discover small to medium-sized deposits of iron ore, gold, manganese, nickel, chromium, and lead-zinc. Also, industrial and energy minerals represent bright spots for the future development of the solid minerals sector by investing in their exploration, exploitation, and beneficiation.
The exploitation of the extensive bitumen deposits which are the second largest in the world and the revitalization of the iron and steel industry using local raw materials will boost the minerals and mining sector and serve as a backbone of the industrial ‘revolution’. Efforts must be accelerated to control or minimize the illegal mining and smuggling of gold and gemstones which is a drain on the national economy. Nigeria’s solid mineral and mining sector is moving steadfastly along a path of transitional change, and it is a matter of time for the implementation strategies to achieve the desired goals and outcomes.
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